Planning for Aged Care? Here’s What the New 2025 Pricing Changes Mean for You

As part of our commitment to keeping you informed about developments in aged care, we want to update you on important changes to aged care pricing regulations that may affect clients exploring residential care options in the future. These changes, effective from 1st January 2025, will adjust the cap on Refundable Accommodation Deposits (RADs), a key component of aged care fees.

What Is Changing?

Currently, aged care providers must obtain approval from the Independent Health and Aged Care Pricing Authority (IHACPA) to charge a RAD exceeding $550,000 for a room. This cap increased to $750,000 starting on 1st January 2025.

Key Points to Note:

1. Existing Agreements Remain Unaffected
   Individuals who have already signed permanent residential care agreements for their selected rooms will not be impacted. Their agreed-upon room prices will remain unchanged.
2. Future Agreements and Room Changes
   • Clients entering aged care after 1st January 2025 or requesting voluntary room changes within facilities may be subject to the new $750,000 cap.
   • Facilities will need IHACPA approval only if they charge more than $750,000 for a room.
3. Impacts on New Clients
   • The cost of moving into aged care depends on the chosen room, the negotiated price with the provider, and whether the aged care home has IHACPA approval to exceed the cap.
   • Many aged care homes already charge above $550,000 for certain premium rooms. These providers have previously required approval to do so. Starting in 2025, they will only need approval for rooms exceeding the updated $750,000 threshold.

What Does This Mean for Clients?

For individuals and families considering aged care options, it’s important to understand the implications of this change:

• Enhanced Choices: The higher cap may allow providers to offer a broader range of room options and amenities.
• Financial Planning: Clients should review their financial strategies to ensure they are prepared for potential increases in accommodation costs.

How We Can Help

Navigating aged care options can be complex, but support is available:

• Expert Advice: Speak with aged care advisors to understand how the changes might affect your options.
• Personalised Planning: Assess your budget and needs to find the best fit among available facilities and rooms.
• Transparent Communication: Aged care providers are required to disclose all pricing details and any approvals they hold for exceeding the RAD cap.

These changes to aged care pricing are designed to provide greater flexibility for providers while maintaining protections for clients through the IHACPA approval process. Staying informed and proactive will help ensure that clients can make confident, well-prepared decisions about aged care.

If you have questions or need assistance with aged care planning, feel free to reach out by calling 1300 197 230. We're here to guide you through every step of the process.